12 Climate Tech Innovators Building a Net Zero World

It’s 2050, and you arrive at the restaurant in a car running on newly-recycled batteries whose copper and nickel were once used in another EV. The waiter strides up to the table and sprinkles a pungent protein powder made from fermented microbes onto a bowl of chemical-free edamame.

As you leave, your chair scrapes on a smooth gray floor made from carbon-free concrete delivered in ready-mix sacks on a freight ship fueled by cheap, clean-burning green hydrogen.

Welcome to the net zero future that the 12 winners of BloombergNEF’s Pioneers awards are working to build.

The award was conceived by Bloomberg’s energy-transition research arm as a way to spotlight early-stage innovators and identify those game-changing technologies that could power the Teslas of tomorrow.

Electric cars have barely broken through as the vehicles of the future yet entrepreneurs are already figuring out how to recycle the batteries they rely on and reduce the need to mine ever larger quantities of rare earths and precious metals.

High costs and a nascent market mean green hydrogen’s deployment today amounts to little more than a rounding error. But a surge in government support suggests supply will outstrip demand by the end of the decade, with low prices making it a go-to green fuel.

What seems a stretch today, could well be mundane tomorrow.

When BNEF launched its Pioneers awards back in 2010, the climate tech ecosystem was comprised mostly of companies developing solar, wind and battery solutions.

Its search for potentially disruptive climate technologies led to five winners that first year. There wasn’t a lot to choose from and the focus was firmly on the fundamental questions.

How can you power the world in a sustainable way? And how do you make it make financial sense?

Fast forward to 2023 and those problems have, for the most part, been solved. Renewable energy technologies are not only here, but solar is now cheaper to build and operate than fossil fuel power generation in most parts of the world.

They’ve graduated from a frontier technology backed by risk-taking venture capitalists to a scaling problem. The biggest obstacle facing solar power today is not the cost of panels but the lack of transmission capacity — the grid infrastructure can’t keep up.

Today’s startups have moved on to greening the rest of the economy, from what we eat and how we produce it, to the way we fuel global trade and how we manufacture the building blocks of future homes.

There’s more funding available today for clean tech innovators than ever, from venture capitalists, from banks, from governments looking to curb emissions fast enough to meet the Paris Agreement goals and limit global warming to 1.5 degrees Celsius.

In Europe, a combination of regulation and incentives is pushing companies to cut emissions. Last year, the US joined the party, passing the most significant climate legislation in its history, which by BNEF’s estimates could unlock as much as $1 trillion in government support for climate solutions and trigger a wave of private financing. From rooftop solar at home to sustainable batteries for export, China, which already dominates the clean economy supply chain, is continuing to advance.

Last year, investment in clean energy worldwide equaled fossil fuels for the first time. In the US, sales of combustion engine vehicles will likely never recover to pre-Covid levels. The future’s electric.

It’s taken a long time to get here and there’s still a long way to go. Rising interest rates and slowing economies mean investors are likely to be more circumspect about backing high-risk or unproven innovations this year than they were last. And there will be other set-backs on the road to net zero.

Take Russia’s invasion of Ukraine last year. It unleashed an international dash for oil and gas and prompted some governments to reopen idled coal plants. Rising rates have also hit the tech sector hard and Silicon Valley Bank, long seen as the startups’ lender, is no more.

“We have reached certain tipping points,” said Mark Daly, head of technology and innovation research at BNEF, which has been tracking climate investment trends for more than a decade. “But there are plenty of other areas of the economy where a tipping point has not been reached. And unless there’s more innovation and development there, it never will be.”

Each year, BNEF sets three challenges that need to be overcome to clear the path to net zero — and a “wildcard” bracket for early-stage companies doing something different. This year, it called for entries in three categories — hydrogen, metals and food. The 12 winners below were selected out of 348 entries. Bloomberg Green reporters and editors joined deliberations in the final round.

Hydrogen, the most abundant chemical element in our world, emits no planet-warming gasses when burned, presenting a tantalizing solution for hard-to-abate sectors like shipping.

The batteries needed to propel a container ship would be so heavy and bulky, it wouldn’t make economic sense. Steelmaking and other heavy industries often rely on fossil fuels or high carbon minerals not just to produce intense heat, but to create a chemical reaction.

So-called “green hydrogen” can serve as a feedstock for fertilizers and chemicals, a source of heat for steel or aluminum production, or a fuel for heavy transport, particularly when converted into derivatives like ammonia, a liquid that can be transported using existing infrastructure and equipment.

There are different ways to make hydrogen, including from fossil fuels. But green hydrogen is made by splitting water using industrial-scale electrolyzers in a process powered by renewable energy.

Despite its potential, hydrogen has played a small role in the energy transition so far. That’s because it’s still relatively expensive to make, store and transport. And despite its potential versatility, most machines and industries aren’t adapted to use it. With major subsidies for hydrogen set to kick in from the US climate bill, all that could change. BNEF awarded three startups working to make green hydrogen mainstream.

The electric future will require a massive increase in the supply of metals such as lithium, cobalt and nickel, which weren’t that useful in the motorized world of the 20th century but are essential components of today’s EV batteries. More electricity also means a lot more copper to conduct the current. BNEF expects annual demand for refined copper to grow 58% by 2040.

Shortages of rare minerals and metals could drive up the cost of the energy transition — and potentially hold it back.

But mines take years to build and can have a devastating impact on soil, water, wildlife and local communities, especially in poorer countries that suffer from a lack of regulation. A dark legacy of labor exploitation, sometimes involving child workers, already hangs over the metals supply chain.

To avoid a situation where the energy transition addresses one problem but creates another, a new generation of startups is working on ways to mine more efficiently and more cleanly — and to recycle the metals and materials that have already been used.

Others are developing technologies that require fewer rare materials in the first place. BNEF identified three Pioneers that are aiming to bring efficiency to the supply chain for future metals.

Food production has a massive impact on our world. One in four people worldwide work in farming, an activity that occupies half of all habitable land and, along with forestry and associated land uses, is responsible for 23% of planet-warming emissions.

Farming has led to drastic biodiversity loss over the centuries, and modern use of chemical fertilizers, pesticides and weed killers has poisoned soils, polluted freshwater and drained aquifers. Livestock alone account for nearly 15% of human-induced emissions, a reflection of our growing appetite for meat. One of the major contributors to that is methane, a greenhouse gas that is more potent than CO2 and is released by ruminant animals like cattle and sheep.

But while other sectors like transport and power can benefit from breakthroughs in renewable energy and battery technologies, the impact on agriculture emissions is limited. Reducing the climate footprint of the food industry requires a different approach, from developing more sustainable sources of protein for ourselves to changing what we feed farm animals and pets. It also means reducing our reliance on chemicals and coming up with more resilient crops and more sustainable farming practices.

None of these methods have been scaled to the extent needed to clean up a sector that will become more vital as the world’s population grows. Startups working on technologies and business models to decarbonize agriculture raised $5 billion in equity financing in 2022, 4% of the total raised by climate tech startups globally. Funding fell 65% relative to 2021.

The world needs to rapidly come up with new technologies to produce more food while doing less damage. BNEF chose three companies that are working on different solutions to that challenge.

Each year, BNEF Pioneers has a wildcards category open to any climate innovation but, this year, a pattern has emerged.

While the 2023 winners are ostensibly working on very different problems — how to decarbonize steel and cement and suck carbon from the air — they’re all looking to electrochemistry for the solution.

The centuries-old science of how chemical reactions conduct electricity is still taught in American high schools today. Yet for decades, abundant, cheap and combustible fossil fuels had the competitive advantage in everything from power generation to heavy industry.

Left behind for more than a century, electrochemistry-based methods are seeing a renaissance thanks to increasing electrification. Cheap renewable power and the push to decarbonize is prompting entrepreneurs to apply this old approach to new problems.

Green solutions rooted in electrochemistry are still at an early stage, but they’re looking particularly promising for hard-to-abate industries like steel and cement.

Updates third chart to exclude investments in grids and fossil fuels from forward-looking data.

Edited by Lin Noueihed
Illustrations by Minky Lee and Jo Willard
Charts by Christopher Cannon